XEROX CORP. $6.48 (New York symbol XRX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.3 billion; Market cap: $8.4 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.6%; TSINetwork Rating: Average; www.xerox.com) now gets half of its sales from managing certain tasks, such as billing and accounting, for its clients. It sells these services under long-term ontracts. That gives it more predictable revenue streams than selling copiers and other hardware.
Still, demand for the company’s products and services is cyclical, and the stock will likely stay in a narrow range until global economic growth improves. Xerox’s $7.5-billion long-term debt is also a high 89% of its market cap. That means the company will likely put more of its future cash flow into debt repayments and less toward buying back shares or raising its dividend.
Xerox is a sell.
